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Strategies & Market Trends : Technical Analysis- Indicators & Systems

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To: TechTrader42 who wrote (2605)8/21/1997 11:22:00 AM
From: OpenMind   of 3325
 
Brookelise,

For you and all others interested in AMA's. Here is a quote from Jurik Research's catalog:

"Another moving average described in popular magazines is Chande's VIDYA (Variable Index Dynamic Average). The index used most often inside VIDYA to govern its speed is price volatility. As short-term volatility increases, VIDYA's exponential moving average is designed to move faster, and as volatility decreases, VIDYA slows down.

On the surface this makes sense. Unfortunately, this design has an obvious flaw. Although sideways congestion should be thoroughly smoothed out regardless of its volatility, a highly volatile period of congestion would be closely tracked (not smoothed) by VIDYA. Consequently, VIDYA may fail to remove unwanted noise."

More information can be found at: jurikres.com

Jerry
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